Intestacy

Question 1

When will a total intestacy arise?

Answer 1

Where there is no valid will or the will fails to dispose of any of the deceased’s estate

Question 2

When will a partial intestacy arise?

Answer 2

When a valid will fails to dispose of all of the deceased’s estate → rules apply to the part that is not disposed

Question 3

What do the intestacy rules create?

Answer 3

A statutory trust over the intestacy property

• Property is held on trust by the PRs, who pay the deceased’s debts & expenses
• Remaining balance (‘residuary estate’) is shared in accordance with the orders set out in s46 AEA 1925

Question 4

What is the definition of ‘spouse’ in the intestacy rules?

Answer 4

The person to whom the deceased was legally married at the time of their death (nature or quality of relationship is irrelevant)

Question 5

How is an estate distributed on intestacy when there is a surviving spouse & no issue?

Answer 5

The whole estate passes to the spouse absolutely

Question 6

How is an estate distributed on intestacy when there is a surviving spouse & issue?

Answer 6

I. The spouse gets the personal chattels absolutely

II. The spouse receives tax-free statutory legacy of £270,000 (£322k for deaths on or after 26 July 2023)

III. The rest (residuary estate) is divided in half:

• One half is held on trust for the spouse absolutely
• Other half is held on statutory trust for the issue
  -First priority: the children of the intestate (must be 18 or married, otherwise vests)
  -If any child predeceased intestate, the grandchildren take their deceased parent’s share equally between them

Nb. spouse must survive for 28 days to inherit

Question 7

What are personal chattels under the intestacy rules?

Answer 7

All tangible moveable property except property which:

• Is money or securities for money
• At death of intestate was used solely or mainly for business purposes
• At death of intestate was held solely as an investment

Question 8

What is the statutory legacy for a surviving spouse?

Answer 8

£270,000

(£322,000 for deaths occurring on or after 26 July 2023)

Question 9

When there is a surviving spouse & issue, how is the residuary estate held?

Answer 9

After spouse receives statutory legacy, remaining estate is divided in half

• One half is held on trust for the spouse absolutely
• Other half is held on statutory trust for the issue
  -First priority: the children of the intestate (must be 18 or married, otherwise vests)
  -If any child predeceased intestate, the grandchildren take their deceased parent’s share equally between them

Question 10

How long must a spouse survive the intestate to inherit?

Answer 10

28 days

If die within 28 days, estate distributed as if no surviving spouse

Question 11

What happens to the family home on intestacy when there is a surviving spouse?

Answer 11

If held together as beneficial JTs, passes by survivorship

If held in intestate’s sole name or as TICs, will not automatically pass

• Forms part of the residuary estate
• Spouse can require PRs to appropriate the family home in full or partial satisfaction of their interest
• Only applies if surviving spouse is living in the property

Question 12

How is the estate distributed on intestacy where there is no surviving spouse?

Answer 12

Divided between the intestate’s relatives in the highest category:

1. Issue on the statutory trusts
2. Parents, equally if both alive
3. Whole brothers & sisters on the statutory trusts
4. Half brothers & sisters on the statutory trusts
5. Grandparents, equally if more than one
6. Whole aunts & uncles on the statutory trusts
7. Half aunts & uncles on the statutory trusts
8. Bona vacantia

Nb. statutory trusts = each member of category takes estate equally & the issue of a pre-deceased member can take that relative’s share